The postings of a customs lawyer in Chicago on the state of customs law and international trade law. Important Disclaimer: None of this is legal advice, don't act on it. Don't ascribe these statements to my law firm, its partners or clients. Don't steal from my blog. I wrote it, I own it. But, feel free to link to me. Also, under the rules regulating speech by attorneys, this blog may be construed as lawyer advertising. I am the sole party responsible for the content.

Tuesday, December 16, 2008

Are We In the Holiday Doldrums?

Seems awfully quiet out there.

Washington is in pre-inauguration limbo and a lot of businesses are quiet either due to the economy, the cyclical nature of their business, vacations, or just the weather. It seems to me that there hasn't been much about which to write lately. (Perhaps I should post on whether it is worth sounding pompous to avoid ending a phrase with a preposition.)

So, I will pass on this item about festive articles. After years of litigation, Customs and Border Protection has issued new guidance on how to classify festive articles in the wake of Michael Simon Design, Inc. v. U.S. This guidance does not go to bakers' wares at issue in the ongoing Wilton case, nor does it cover costumes, which were previously resolved.

The upshot is that for entries post February 3, 2007 utilitarian articles like tableware, apparel, and bed linens are excluded from Chapter 95 by virtue of new Note 1(v). Following Michael Simon Design, the exclusionary note does not apply to entries prior to that date (although CBP argued that it should).

As a result, liquidation instructions appear to be as follows:

Entries prior to February 3, 2007

Utilitarian article with festive designs may be classified in 9505 as long as the design is closely associated with a festive occasion and they are unlikely to be displayed at other times.

Entries after February 3, 2007

Utilitarian articles with festive designs are to be classified according to constituent material and as tableware, linen, etc. pursuant to Chapter 95, Note 1(v). But (and this is a big but), if the design of the product is so closely associated with a festive occasion that displaying it at other times of the year would be unlikely (or "aberrant"), CBP is going to withhold liquidation pending the creation of a special Chapter 98 classification to guarantee rate-neutrality. What that is all about is the fact that if goods were previously properly classified as festive articles, the rate of duty should not increase when the classification changes as a result of the amended Chapter Notes. This has to do with the fact that the law requires amendments to be as revenue neutral as possible.

Now . . . as the holiday season rapidly approaches and as I watch the snow pile up outside my window, I have the opportunity to expound on my personal, sure-fire test for whether something is a festive article. I call it the Rabbinical Test. Take any arguably festive article associated with Christmas or Easter and show it to a rabbi. If the rabbi says, "I would never have that in my house," it is a festive article. For example, take a serving platter in the shape of a snowman--top hat, corn cob pipe and all. There is nothing overtly religious about this item. Yet, everyone knows it is a Christmas item. If you tried to give it to a rabbi, the response (whether spoken or not) would be, "Oy, a chotzke I don't need. More mashugana chazerai from the goyim."

Take this pitcher. The only way it gets into my house is by accident. It's festive, and I'm not even a rabbi.

This works in reverse. If you show a Seder plate or Hanukkah sweater (if there is such a thing) to a priest and he says "I have no use for that," we know it is festive. Of course, you need to tailor the test for the festive occasion. I believe certain sects do not celebrate birthdays or Halloween, so they get those items for review. I think you see my logic.

Of course it will fall apart when Starbucks cleverly tries to get a Mormon to declare coffee a festive article.

1 comment:

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